New York’s budget plan would apply a 75% wholesale tax to nicotine pouches, raising projected revenue

Jan.21
New York’s budget plan would apply a 75% wholesale tax to nicotine pouches, raising projected revenue
New York Gov. Kathy Hochul is proposing to tax ZYN nicotine pouches and other nicotine products at the same rate as cigarettes, applying a 75% wholesale tax under her proposed $260 billion state budget.

 

Key Takeaways

 

 

• New York Gov. Kathy Hochul proposes taxing ZYN and other nicotine pouches under the state budget

• The proposal would apply a 75% wholesale tax, projected to raise $18 million and then $44 million when fully implemented

• Philip Morris says the tax raises public health and affordability concerns and could make it harder for adults to switch from cigarettes

• Rutgers researcher Cristine Delnevo argues for an evidence-based, differentiated tax — above zero but below cigarettes

• The report includes product details on ZYN strengths and flavors and notes concerns about underage use

 


 

2Firsts, January 21, 2026

 

According to the New York Post, New York Gov. Kathy Hochul is pushing a plan to tax ZYN nicotine pouches and other nicotine products at the same rate as cigarettes. Under Hochul’s proposed $260 billion state budget, the pouches would face a 75% wholesale tax, a move projected to generate $18 million in the fiscal year beginning April 1 and $44 million when fully implemented the following year.

 

The report says critics argue the tax could undercut alternatives they view as less harmful than smoking. A spokesperson for Philip Morris, the manufacturer of ZYN, said the new tax “raises serious concerns from both a public health and affordability standpoint.”

 

The report notes that ZYN was the first nicotine pouch approved for sale by the U.S. Food and Drug Administration (FDA) last January. Philip Morris said about 1.4 million New Yorkers still smoke cigarettes, and it said smoking rates are highest among low-income and less-educated households. The company statement said a tax “of this magnitude” makes it harder for adults to switch off cigarettes, while also praising Hochul for putting “improving public health and affordability” at the center of her agenda and expressing interest in working with her administration and the legislature.

 

The report quotes Cristine Delnevo, director at the Rutgers University Institute for Nicotine & Tobacco Studies, saying: “Tax policy should reflect relative risk,” and warning that taxing nicotine pouches the same as cigarettes “could undermine harm reduction,” while leaving them untaxed “could encourage youth uptake.” She advocated “a differentiated, evidence-based tax—above zero but below cigarettes.”

 

The report also cites Richard Marianos, director of the Tobacco Law Enforcement Network and a former official with the Bureau of Alcohol, Tobacco Firearms and Explosives, who urged a focus on cracking down on criminal networks selling illegal cigarettes and higher-nicotine vapes, adding: “The tax is counterproductive because people won’t have an alternative.”

 

The report references a recent discussion sparked by an article in the Journal of the American Medical Association titled, “Can Nicotine Pouches Help People Quit Smoking?” It also describes ZYN pouches as being placed between the lip and gum, sold in 3-mg or 6-mg strengths, and available in flavors including coffee, menthol, peppermint and cinnamon. It quotes Jonathan Foulds, a professor at Penn State University, in JAMA discussing interest in using “a less harmful nicotine product like pouches” to reduce smoking.

 

On the other side, the report says critics fear nicotine pouches could become a new trend like vaping and see an explosion in use among underage users.

 

Photo credit: New York Post

 

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